This Income Tax Act amendment affects all unions and umbrella labour organizations in Canada (such as the Canadian Labour Congress, provincial Federations of Labour, etc.) C-377 went to Canada’s Senate on December 13, 2012

There are many who played a role in this Bill with their time, expertise, talents and encouragement to help ensure an informed process. LabourWatch is pleased to have played a role in providing informed expertise in many different ways, but particularly on how disclosure currently works (or does not . . .) in Canada as well as abroad.

The Senate can pass or defeat C-377 sometime in 2013. Then the Government must exercise its final role and actually grant Royal Assent (it could choose to not do so). If all of that happens then Canada Revenue Agency implementation in 2013/14. Big labour has promised years of union legal challenges.

Labour Organization Financial Information for Canadians

Private Members Bill (PMB) Bill C-377 began its journey through Canada's Federal Parliament on September 29, 2011 as Private Members Bill C-317. C-317 was approved by the House Subcommittee on Private Members' Business (SMEM) in October 2011, but later rejected by the Speaker in response to a NDP procedural challenge. A major public sector union (PIPSC) later told the media that they had helped the NDP figure out how to stop the Bill. C-317 was revised in accordance with the Speaker’s ruling and returned to Parliament as Bill C-377.

Both Bills were sponsored by MP Russ Hiebert who represents South Surrey - White Rock - Cloverdale. The purpose of this section of our website is to provide relevant factual information about this important public policy topic.

Today, in Canada, tax exempt labour organizations, including unions, are not required to make public their financial affairs. This is in contrast to countries like France and America that have public union disclosure as a result of union leadership in seeking and supporting it. Numerous other nations such as Germany and Australia also have public union financial disclosure.

The Bill extends the principle of charities publically reporting financial information (to the Minister of National Revenue) to a group of institutions that also enjoy substantial public benefits - labour organizations (including unions). But union tax and legal privileges far exceed that of charities or any other set of organizations in Canada.

Labour organizations are exempt from taxation. Unionized Canadians who pay dues deduct those dues from their taxable income. Dues are almost always a “condition of employment” – employees who do not pay them can be fired from their jobs – a possibility sanctioned by labour codes. Strike pay is also not taxable income. Unions transfer dues to local, provincial and national umbrella labour organizations.

Unions and other labour organizations have made many false claims about disclosure in Canada. The most notable has been to say that the public can get access from labour boards. This chart is the truth. Neither the public nor dues payers who are not actual union Members have legislated access to union, let alone umbrella labour organization financials. In only 8 of 14 Canadian tax jurisdictions can actual union Members only make a request. The Hubner line of case law demonstrates how hard unions can make this supposed access.

The Federal Finance Department's 2010 estimate for the union dues deduction represents hundreds of millions in foregone tax revenue on billions of dollars in dues, investment income and union training centre profits because dues are 100% deductible from Federal taxable income. Labour organization investment income is not taxed federally. Provinces may have different approaches to the tax treatment of dues, investment income and other types of revenue.

The basic premise of this Bill is that every labour organization in Canada will file a standard set of financials each year, which will then be made available to Canadians on a public website, likely similar to the current Charities Directorate website

This Bill will allow all Canadians to see how tax deductible monies are being spent by these tax exempt organizations.

With the financial information the Bill will require, the public will be empowered to better gauge the effectiveness, financial integrity and health of Canada's taxation system as it relates to the privileges granted to labour organizations (including unions). Unionized workers who pay dues will be able to do the same.

This legislation is good for unionized Canadians by enabling them to see how their dues are spent as well as their union's revenue regardless of whether or not they are an actual union member.

Former union leaders, who have asked to remain anonymous, have made allegations to us of financial irregularities in unions that they worked with.

The public is always better served by increased transparency and accountability and the Bill extends that principle to labour organizations.

Nanos Research State of the Unions 2011 survey recently found that 83% of working Canadians support financial disclosure for public and private sector unions.

It is very striking that 86% of unionized Canadians support public financial disclosure.

However, select "Federal and Territories", if any of the following apply:

You live in Northwest Territories, Nunavut or Yukon.

You work as a federal civil servant anywhere in Canada.

You work in one of the following industries:

airports or air transportation

broadcasting - radio, television or cable television

telecommunications

banking

fisheries (but only if your business relates to the protection and preservation of fisheries as a natural resource)

shipping and navigation (including loading and unloading vessels)

grain handling

uranium mining and processing

certain federal crown agencies

You work in one of the following industries AND (a) your activities connect one province to another OR (b) extend beyond the limit of one province:

air transport

canals

ferries, tunnels and bridges

highway transport of good or passengers

railway transport of goods or passengers

Employees in the Federal and Territories jurisdiction are covered by Federal laws passed by the Canadian Parliament. Private sector employees are covered by the Canada Labour Code and the Canada Industrial Relations Board (CIRB). Most full-time public sector employees – federal civil servants - are covered by the Public Service Labour Relations Act and the Public Service Labour Relations Board (PSLRB).